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Saturday, July 14, 2012

What... no "Fracking Insurance"?

On Monday (July 9) the Tioga County Landowners Group
presented a panel discussion and screening of the gas industry’s newest flick.
During discussion before the film Lindsay Wickham, NY Farm Bureau’s Region 4
field advisor, talked about how Farm Bureau views shale gas drilling. Farm
Bureau is unapologetically pro-drilling, said Wickham, and they’ve got more
than 50 policies addressing the issue in their policy book.

While Wickham (and the Farm Bureau) are eager to see
drilling happen – as long as farmers are paid fairly for leases and royalties –
he emphasized that the Farm Bureau remains “committed to preserving the quality
of water and land.” After all, farmers depend on healthy soil and clean water
to raise their crops and livestock.

The risks of hydro-fracking are very low, said Wickham. It’s
drilling that’s risky. He mentioned surface spills, cement casing problems and human
errors.

Three days later, Nationwide Mutual Insurance Co – the very
company that insures farmers – announced that its policies do not cover damage related to fracking. The company’s commercial and personal insurance policies “were
not designed to cover” that sort of risk, said Nationwide spokeswoman Nancy
Smeltzer. It seems that the risks involved in fracking operations “are too
great to ignore” and “are now prohibited for General Liability, Commercial
Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto coverage.”

That prohibition applies to folks who haul water to and from
drill sites, people who operate equipment on the well site, contractors
involved in fracking operations, and landowners who lease their property for
drilling.

Around here, the biggest landowners are farmers. They belong
to the NY Farm Bureau which, six months ago, teamed up with Nationwide to offer
special “members-only” insurance rates on farm insurance, auto insurance and
everything in between. But not Fracking Insurance. Nationwide doesn’t offer
that – nor do other insurance agencies. Mine doesn’t; I called and asked.

This leaves farmers – and other landowners – in a sticky
wicket, as my dad would say.

Let's see if I got this right - NYFB is pro-fracking, ie pro-drilling, as long as the quality of the land and water are preserved, yet they recognize that drilling is a high risk activity to both land and water. Their insurance partner Nationwide recognizes the risk and will no longer insure farmers against risks associated with fracking. So when will NYFB recognize the risks and change their pro-drilling stance?

Gee, I can't imagine that the landsmen and The Industry wouldn't tell the people who were about to sign a lease that this was going to be a problem with their homeowner's insurance. They must have forgotten that detail.

The other day on the Susan Arbetter program, the New York Farm Bureau spokesperson stated that The Gas Industry could maybe pick up with insuring these people who lost their home insurance. What a joke. The Gas Industry itself is Under Insured and has no problem with this. Also, it seems evident that The Gas Industry will establish LLCs, individual corporations for gas wells, which will be asset poor so that when they are sued for their leaky failures, they will be with empty pockets, and no cash to be found.